Chapter 1: Barking Up the Wrong Tree

PROBLEM: Despite the proliferation of management schools, the inflation of incentives and the flood of management books and consultants, the goal of finding or training the ideal manager remains as elusive as the unicorn.

A CORPORATE FAIRY TALE (THE OUTDATED PARADIGM)

According to the classic managements textbooks and best-selling guides, the ideal manager is knowledgeable, achievement-oriented, detail-oriented, systematic, and efficiency-oriented; organized, a logical and linear thinker; charismatic, visionary, a risktaker, and changeoriented; and sensitive to people and their needs. He can integrate all the necessary people to successfully achieve goals. He knows how to build a team while making himself dispensable. He judges himself by how well his group performs; by how well, together and individually, the group members achieve their goals, and by how well he facilitates the achievement of those goals. He listens carefully, not only to what is being said but also to what is not being said. He understands the need to change, but introduces change cautiously and selectively. He is able to identify leadership potential among his staff and is not afraid to hire and promote bright, challenging subordinates. He is self-confident enough to respect people whose styles are different from his own. He doesnt complain when things go wrong, but offers constructive criticism instead. His subordinates are not afraid to report failures; they know that he will be reasonable and supportive. He encourages creativity and looks for consensus in decision-making. He is charismatic, capable of motivating others to work hard to achieve the goals of the organization. He can delegate. He trains his subordinates systematically. He resolves conflicts diplomatically, respecting peoples expectations and ambitions and appealing to their social consciences. He shares information instead of monopolizing it and using it to gain power. He is driven by a strong code of values. He is analytical and action-oriented; sensitive without being overly emotional. He seeks results, but never by sacrificing the process. He systematically develops markets, production facilities, finances and human resources for the organization. His organization is a well-integrated entity with defined goals, whose members fully accept and cooperate with one another. No dysfunctional behavior on the part of his subordinates is easily observable. The problem is: Where on earth do you find this animal? With the exception of ourselves, of course, there arent too many of those managers around. Who is wise? He that learns from everyone. Who is powerful? He that governs his passions. Who is rich? He that is content. Who is that? Nobody. BENJAMIN FRANKLIN Joking aside, the reason you cannot find this ideal manager is because he is perfect, and the perfect manager is as mythical as the unicorn. Thats why I call this theoretical person the textbook managerbecause he or she exists only in textbooks. Expecting to find perfection is a characteristic of adolescence; we should have passed that stage by the time we reach adulthood. That is why I am bewildered by textbooks and schools that keep trying to produce something that cannot be produced. No wonder many executives are frustrated with their MBA-trained managers. No wonder, also, that

management consultants are losing credibility and that management trainers are paid poorly.

WHAT IS MANAGEMENT?The New York Times once wrote an article about me in which it called me the corporate exorcist[1.]: I go from company to company trying to exorcise management from believing they can do that which they cannot. What is it they cannot do? They cannot find, or even train, the ideal manager, executive or leader. Why not? Well, before we can say why not, lets define our terms. What do we mean by the words: To manage, manager, management, mismanagement, and leader? I remember the day a door-to-door salesman tried to sell me the latest edition of the Encyclopedia Britannica. What do you do, sir? he asked. I teach management, I replied. Well, he said, lets see what the encyclopedia has to say about the subject. With increasing uneasiness on his part and bewilderment on mine, we soon discovered that there was no entry for management in the encyclopedia. There was management science, which involves mathematical models for decision-making. There was organizational behavior, which is the sociology of organizations. But plain simple managementwhat millions of people around the world do day in and day outwasnt there. So, what is management as it is taught and practiced today? 1. It denotes hierarchy. When people use the word management, what they usually mean is a group of people whose role is to manage. Each individual in this group is called a manager. Management refers to a certain rank in an organization; in the United States it generally refers to the middle and lower upper ranksone level above supervisors and one level below executives. 2. It is unidirectional. A search through the Funk & Wagnalls, Oxford Illustrated, Random House, and Websters Third New International dictionaries found synonyms for manage including: Accomplish, achieve, administer, alter by manipulation, be in charge, break in, bring about, coerce, communicate, conduct, connive, contrive, control, coordinate, cooperate, cope with, decide, develop, direct, do, Zdominate educate, effect, evaluate, execute, gain ones end with flattery, govern, guide, handle, husband, implement, influence, inspect, inspire, integrate, judge, keep in a desired state or mood by persuasion, lead, listen, make and keep submissive, make happen, make tractable, manipulate, mold, monitor, motivate, operate, order, organize, plan, react, regulate, render subservient, render submissive by delicate treatment, restrain, review, rule, run, steer carefully, succeed in ones aim, supervise, take care or, take charge, teach, train, treat with care, utilize, and wield (a weapon). Is there a common denominator shared by all these synonyms? Yes: They are all a oneway process. The managing person is telling the managed person what to do. In this context, motivating makes the assumption that the motivator has already decided what should be done; motivating is about getting someone else to do it willingly. Leadership: The art of getting someone else to do something you want done because he wants to do it. DWIGHT D.EISENHOWER There was a cartoon in the New Yorker some time ago that illustrated this point nicely: A mother who is a psychologist is trying to convince her son to take out the trash. Wearily, the boy says, OK, OK! Ill take out the trash, but pleeeease, Mom, dont try to motivate me. Even a child perceives motivation as a kind of manipulation.

In motivating, the focus is not on the what and why but on the how. The manager is the head of the department, and the subordinate (note the literal meaning: Sub-ordinary) is at best the right-hand man. And what does the right hand do? Unless youre left-handed, the right hand does exactly what the head tells it to do. 3. It is elitist. In Hebrew, the word for subordinate is kafuf, which literally means bent at the hipslike someone who bows before you out of respect or fear. Managers, on the other hand, have superior vision; that is the source of the word supervision. Military insignia illustrate this principle: A first lieutenants badge has one branch to denote his rank; a lieutenant has two branches, a captain has three. As we ascend in the military hierarchy, we are climbing the tree. A major has a leaf, signifying the top of the tree. And a general, with the highest supervisory authority of all, is way above the treetops, with a star. So you can see that the managerial process, as it is described and taught, is not a valuefree process. It is not only a science and an art, but also an expression of sociopolitical values. 4. It is individualistic. Try the following exercise. Call all your top management into a room. Ask each one of them to write down the companys top five problems. The rules are that, first, no names be mentioned; and second, that they not use the word becauseno explanations for the problem are necessary. Just ask them to note on a piece of paper, which they do not have to show anyone, the top five most critical, significant problems, undesired results, or processes that the company has. All of these problems must be controllable by the people in the room; and it is not acceptable to define a problem as something they are not doing. Focus on what we are not doing. In other words, instead of saying: Competition is increasing, they should write: We are not meeting competition head on. Now ask them: How many of these problems did the company have last year? Dont look at or allow them to share what theyve written. Just ask them: How many of the problems on your list did you also have last year? The answer is usually: One hundred percent. How about two years ago? Most of them, right? How about three years ago? Again, most of them! Now, if this is true, then how many of these same problems are you likely to have three years from now? Most! Right? Why, though? Because look at your list of problems again. How many of them can any individual in the room solve by himself? None!! Right? If they could have, they already would have. Now ask them: How many of these problems would disappear if I gave you a magic pill that would permit you, as a team, to agree on the solution? All of them, right? If you followed my instructions correctly and only wrote down problems that are controllable by the people in the room, then it is true by definition that a solution is possible if only the people in the room would agree to it. So what is the problem? The problem is that we usually have one executive or manager chasing ten problems, rather than ten managers chasing one problem at a time.

The problem is not what you have on your list. What you have are manifestations. The problem is YOU!!! I say. You do not know how to work together. That is the problem!!!! The business world, in other words, is trapped by misguided principles of individualistic management that personify the whole process in a single individual who should excel at planning and organizing and motivating and communicating and building a team and making himor herself dispensable. In reality, however, such a manager does not exist and why it can not exist and what to do about it is the purpose of writing this book. The managerial process is far too complicated for one person to perform A similar bias can be seen in economic theory, which sums up the processes and dynamics of any organization in two words: The firm. The firm will do this, the firm will do thatall depending on the conditions that prevail in the market. But left out of the equation is how this firms decisions are made; thus the economic theory that results from these assumptions tells us only how the decision-making process should worknot how it does work. (More about this later.) Likewise, to the best of my knowledge, the questions of who is involved in management and how they actually make decisions togetherversus how they should make them togetherhas not been addressed. Management theory, like economic theory, personalizes the entire process as if practiced by a single entity. This error leads to a misperception that ultimately hampers our efforts to manage successfully. That is why, when I use the words manager or management, what you should be visualizing is not a person but a process, which by nature encompasses people who may not officially be identified as managers by rank or title. 5. It is industry based. The classic management textbooks teach that managers plan, decide, lead, organize, control, and motivate an organization. However, there are organizations in which management is not supposed to perform some of those functions. Some years ago I studied the management of performing arts organizationsopera, dance, theater, orchestrasand I became aware that artists cannot be managed in the same way as, let us say, one manages workers in industry. Administrative directors need artistic directors to lead the organization. They practically co-manage. Decisions cannot be made by either of them alone. We are the two wings of the Austro-Hungarian eagle, the administrative director of the New York City Opera told me in the 1970s about his relationship with the artistic director. Without both of us, this opera will not fly.[2.] I noted the same phenomenon in the health and educational systems. Here, again, the administrators do not perform all the functions of management: For example, they do not decide policy matters, since the physicians in health delivery institutions and educators in educational institutions have a major say on those subjects.[3.] In high-tech companies, an engineer who knows the technology or may even have significantly contributed to inventing it is indispensable to managing the company. But his financial know-how and business acumen are usually limited. For successful management, he needs someone to make the business decisions with him. Why does our definition of management exclude so many important organizational models? Because management theory was developed based almost exclusively on industrial experiences. Fayol was a mining engineer. Urwick was a military officer. Koontz took his insights from the airline industry. Taylor was an industrial engineer. Druckers early experiences, from which he derived his ideas on management, were in the automotive and publishing industries. Even recent gurus such as Tom Peters and Steven Covey bring experience from the for-profit and industrial spheres to their books. 6. It is socio-political. The managerial process as understood in the West is not universally accepted or practiced. In some countries around the world, the managerial process the way we teach it in our Western textbooks is actually prohibited by law. In Yugoslavia, for instance, during the Communist era of self-management, managers were constitutionally prohibited from making decisions the way we doin other words, for the organization. Rather, the managers role was to suggest to and convince the workers, who had the ultimate authority for determining salaries, production quotas, investments, etc. The self-management system, which adapted democratic principles as they had been conceived for nations and then applied them to industrial organizations, was called industrial democracy. In industrial democracy, the managers belonged to the executive branch. Their role was to recommend and implement decisions that were made by the legislative branch, or the workers council.[4.]

In some other countries, management is socially discouraged. During the heyday of the Israeli kibbutzim, for instance, management was deliberately rotated every two or three years, so that nobody became what in the United States is called a professional manager: A person whose profession it is to decide for other people what they are to do.[5.] 7. It is culturally bound. In certain languages, such as Swedish, French, Serbian and Croatian, the word manage does not even have a literal translation. In those languages, words like direct, lead, or administer are often used instead. When people in those countries want to say manage the way we mean it in the United States, they usually use the English word. In Spanish, the word manejarthe literal translation for to managemeans to handle and is used only when referring to horses or cars. When they want to say manage in the American sense of the word, they use the words direct or administer. I suggest that there is a confusion in the field, which stems from our difficulty in defining the process and what it is supposed to do, and is manifested in our vocabularyor lack of one. Management is not a group of people in the hierarchy of the organization. It is not a rank. It is a process, by which organizational goals are identified and continuously re-identified and eventually achieved. Whoever is involved in this process and wherever he is in the organizational chartwhether he is called an executive, administrator, consultant, leader, manager, or workeris involved in the managerial process and by this definition is a manager. (I want to emphasize the word worker in the previous sentence, because although workers are not customarily considered part of management, they can and often must perform managerial roles if a company is going to be effective and efficient in the short and long run.) Usually we look at the managerial role as one of managing PEOPLE. If no one reports to you, you are not management. (Do you see the elitism, the hierarchy here?) As should be clear from the above paragraph I define management as the process of defining and accomplishing tasks and whoever is involved in this process is part of the managerial team even if no people report to him or her. While no one REPORTS to them they still have to interrelate with others to accomplish the common task. They will not be telling but they must be selling their ideas and perspectives on the task. Instead of controlling that the reporting structure affords (maybe?) they have to motivate and communicate. Thus it is not the reporting relationships that makes one a manager. It is interrelating for a common cause that makes them part of the process and thus, of the management team.[1.]

Fowler, Elizabeth M.: The Team Approved at the Top, The New York Times (Business section, Sept. 16, 1977).[2.]

Adizes, Ichak: Essays on the Management of Performing Arts; Santa Barbara, CA.: Adizes Institute Publications. The manuscript, which is not yet published, is available by request from the Adizes Institute.[3.]

THE FALLACYThere is a big confusion in the field on what management is granted. But one thing we do know is what mismanagement is and it is a subject of books, articles and gossip at cocktail parties But how successful have we been? In spite of the thousands of books written, and the millions if not billions of dollars spent on training managers and consulting services, we have not yet produced a viable, consistent theory and practice of management that is robust, repeatable, universal and holistic. In order to fix mismanagement we need to correctly define it. A proof of this failure is our inability not only to define the process adequately, but even to name it. We are continually creating new words to label new processes that we hope will achieve the desired results. The word that was originally used to describe the process was administration. That is why business schools used to be and some still are called Graduate Schools of Business Administration, and those that are in the profession of managing and have the diploma to prove that they have been professionally trained are Masters of Business Administration and the first journal in the field was the Administrative Science Quarterly. But since administrators failed to produce the desired results, the word administrator is now used mostly as a synonym for bureaucrat. So a new word came into use: Management. Educational institutions became Graduate Schools of Management instead of Administration. But when the desired outcomes were still not achieved, the word management came to denote only the middle level of the hierarchyand the need for a new word emerged. That word was executive; thus we began to hear the terms executive training, executive action and Chief Executive Officer. When even this did not work, the word leadership evolved to replace executive, and this is where we are today (2004). Although there are plenty of books that will tell you how leadership is different from administration, which is different from executive action, which is itself different from management[6.], I suggest that this new fad will not work either. In fact, I would not be surprised if in the next few years yet another new word is coined to define the process, while the word leadership is redefined to mean some piece of the managerial process or hierarchyexactly what happened to the words administration and management. The root problem is that the paradigm has remained the same; it is the same woman in a new dress. The paradigm that has not changed is that the entire managerial process is always personified in a single individual, whether we call him administrator, manager, executive, leader, tsar or sultan, who should do this and should do that. This is a manifestation of the American culture of individualism.[7.] The paradigm of the lone leaderall-wise and all-powerfulhas never workedand as the rate of change keeps accelerating, increasing the level of uncertainty that needs to be dealt with, and as businesses become global instead of local, a paradigm shift is now more necessary than ever.[6.]

WHAT IS NEEDED THEN?

So, then, how should we define managing, if in some countries management is prohibited, in others its socially discouraged, in some organizations it is shared with those who are not even considered to be managersand in some countries the word doesnt even exist? What is needed, first, is to recognize reality, and second, to deal with itwhich involves finding a definition of the process that is value free, universal, applies to any industryboth for- or not-for-profitand that works in the marketplace; in other words, produces the desired behavior and results. As a faculty member at UCLA, and while teaching at Stanford, the Columbia University Executive Programs, and Tel Aviv and Hebrew Universities, I have observed that management theory and texts deal with what should happen, while organizational development (OD), Organizational Behavior, people focus on how things areon the dynamics of the system. OD is more descriptive/analytical, while the management theory and the strategy group is more analytical/prescriptive. The Org Beh group is phenomenological in its approach while the management theory group (which practically disappeared over the years in most universities that teach MBAs) are structuralists as a school of thought. And there is no love lost between the two groups of thought. But the reality is that both approaches are necessary for good management. The question is how does one integrate the behavioral thinking with the prescriptive structuralist thinking. A workable, robust system of management must be descriptive analytical and prescriptive and be based on an honest reflection of reality. And that is what I am trying to do in this series of three books, starting with this one. Please note that this first book in the series is only an introduction, which defines and analyzes what we are doing wrong and what we should be doing differently. The second through the third books in the series will address how to develop good managers based on this paradigm shift. Even these three books could be considered as an introduction. At the Adizes Institute, we offer many courses, manuals, workshops and exercises aimed at deepening ones knowledge and capability to develop and practice good management, using the new paradigm of working in complementary teams to co-lead organizations.

Chapter 2: The Functionalist View

PROBLEM: How, then, do we define management as a value-free and universal process?

THE TASKS OF MANAGEMENT

Let us try to understand the role of management by the function it performs: Why do we need it? The function should be value-free, without any sociopolitical or cultural biases. Whether we speak of managing, parenting, or governingwhether we are managing ourselves, a family, a business, a non-profit organization, or a societyit should be one and the same process conceptually. The only difference is the size and nature of the unit being managed. Let us start with a basic hypothesis: The purpose of the managerial process is to make an organization effective and efficient in the short and long runnothing more, nothing less. If we can achieve effectiveness and efficiency, in the short run and in the long run, that will be sufficient to maintain a healthy and successful organization, whether it is a marriage, a government, a multinational corporation or a candy store. How an organization measures its success is secondary: If the organization is a for-profit company, it will measure success by profits. If it is a political party in power, success might be measured by whether its candidates are elected or re-elected. If it is a research institution, the honors and prizes won by its scientists might be its measure of success.

THE ORIGINS OF THE THEORY

What makes an organization effective and efficient in the short and long run? Some 40 years ago, I discovered that there are four roles that are essential to make an organization effective and efficient in both the short and long run. Each role is necessary and the four together are sufficient for good management. By necessary I mean that if any one role is not performed, a certain pattern of mismanagement can be identified. I made this discovery while preparing my doctoral dissertation on the Yugoslav system of self-management.[1.] The Yugoslavs system was alien to Western minds and experience. Nobody owned capital. Owning capital was like owning air; the whole society had access to it. The Yugoslavs called it social ownership. Capital was the societys heritage. It could not be owned, nor could it be depleted. Thus, organizational profits before depreciation had to be at least equal depreciation. Instead of salaries, people received allowances based on a system similar to surplus sharing among the partners of a law firm. Employees elected representatives to a workers council, and the council interviewed candidates for the job of managing director. Each of the candidates presented a business planvery much like a political candidates platform in a democratic country. The managing director served a four-year term, but could be impeached if he acted illegally: Acting without the authorization of the workers council, for example. Yugoslavs applied political democracy to both their industrial and non-industrial organizations; the system was called industrial democracy or the self-management system. Workers councils functioned as its legislative branch, deciding everything from salaries to budgets to investments. Its executive branch, headed by the managing director, was management, which made recommendations to the workers councils and implemented whatever plan the workers chose. But the system had an enormous weakness: It discouragedoften even destroyedthe (E)ntrepreneurial spirit. In fact, for all practical purposes, (E)ntrepreneurship was illegal. The goal was to create a new human being, whose motivations, according to Karl Marx, would be very different from the exclusively materialistic motivations of old humans.[2.] The system mandated group (E)ntrepreneurship or bust. And bust it went. Because (E)ntrepreneurs are by nature individualistic, few were willing to serve as managing directors under circumstances that limited their freedom to take risks and make decisions independently.[3.] Observing organizational behavior in Yugoslavia, I was able to make certain connections, like Dr. Linde, the British physician in the mid-18th century who found himself aboard a ship with no available sources of vitamin C and recognized the connection between that deficiency and scurvy, a common disease among sailors. I discovered that if a certain role of managementsay, Entrepreneurshipis suppressed, organizations will develop certain predictable managerial diseases. Over the course of thirty years I studied the relationship between each role and specific types of organizational behavior. I analyzed which role combinations would result in which managerial style, and how a deficiency in any particular role would lead to a predictable mismanagement style. This insight led naturally to a diagnostic and therapeutic methodology that I tested successfully at hundreds of organizations worldwide.[1.]

THE (PAEI) CODE

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What are those roles and how should they be managed together? They are (P)roducing, (A)dministrating, (E)ntrepreneuring, and (I)ntegrating; or (PAEI). Let me begin by giving a brief definition of each. The first role that management must perform in any organization is to (P)roduce results, making the organization effective in the short run. Why are people coming to you? Why do they need you? What is the service they want? The (P)roducers job is to satisfy this need. It can be measured by how many people come back to obtain your competitive products or services. The second role, to (A)dminister, sees to it that the organizational processes are systematized: That the company does the right things in the right sequence with the right intensity. It is the role of (A)dministration to ensure efficiency in the short run. Next, we need a visionary who can foresee the direction the organization is going to take, someone who can naturally pro-act in an environment of constant change and thus guarantee the companys effectiveness over the long run. This is the role of the (E)ntrepreneur, which combines creativity with the willingness to take risks. If the organization performs this role well, it will have the services and/or products that its future clients will want and seek. Finally, management must (I)ntegrate, which means to build a climate and a system of values that will motivate the individuals in the organization to work together so that no one is indispensable, ensuring that the organization will survive efficiently in the long run. A healthy organization is one that is effective and efficient in the short and the long run. In problem-solving, each role focuses on a different imperative: Open table as spreadsheet INPUT The Roles (P)roduce results (A)dminister (E)ntrepreneur (I)ntegrate THROUGHPUT OUTPUT

Make the organization Functional Systematized Proactive Organic

To be effective efficient effective efficient

In the short run short run long run long run

(P): What should be done? (A): How should it be done? (E): By when/why should it be done? (I): Who should do it?

If all four of these questions are not answered before a decision is finalized, then that decision will be only half baked. If you both (P)roduce the expected results and (A)dminister well, youll be effective and efficient in the short run. But you will be profitable for the short run only. (Why this is so will be discussed later in this book.) If you (E)ntrepreneur and (I)ntegrate only, youll be effective and efficient in the long run, but you will suffer in the short run. For a company to be profitable in the short and long run, it must perform all four roles well. In a not-for-profit businessfor example, a government agencythen by capably performing the four roles you will achieve service, political survival, or whatever goal you are looking for. Even parents have to perform these roles, because a family is an organization and thus a system that requires all four roles to be performed. In the traditional family, the husband performs the (E) and (P) roles, building a career and bringing home the bacon. The wife is the (A) and the (I), transforming a house into a home and a group of adults and children into a family. By contrast, look at what we call the modern, extended, two-career family. What could happen if the roles arent carefully divided and shared? Two (P)/(E)sand a family that needs a maid to do the (A) housework and a family therapist to do the (I) work.

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In any organization, in any technology, in any culture, of any size, these four roles are necessary and together they are sufficient for good management. Any time one or more of these roles is not being performed, there will be a predictable, repetitive pattern of mismanagementall over the world, regardless of culture, regardless of technology, regardless of the size of the organization or the purpose of the organization

MANAGEMENT AND MISMANAGEMENT STYLES

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These four roles can codify many phenomena. When applied to managerial styles, the codification is a kind of shorthand for predicting a managerial style, determined by how well and in what combination the four roles are performed. If the combination is known, the style is predictable. Most managers excel at one or two roles, are comfortable with them and tend to rely heavily on them in their behavior. Although no single person can excel at all four roles, good managers must have at least a modicum of ability in each. It is these dominant roles and the deficient ones that I use to characterize a basic management style. For example, a manager may excel at (P)roducing while being merely competent at the other roles. I would code that managers style, then, as a (Paei)the uppercase P designating excellence and the lower-case a, e, and i designating competence. Another manager may excel at organizinga (pAei); while a third(paEi)may be good at sensing future trends, and a fourth(paeI)at motivating. A manager codified for the basic archetype style is in most situations a (P)roducer, an (A)dministrator, an (E)ntrepreneur, or an (I)ntegrator. Any permutation of the combined performance of these four (PAEI) roles, if each role varied from 1 to 100, yields a management style, and there are innumerable permutations as many as there are people on earth: (PA--) for the slave driver, (paEI) for the Statesman etc. (see volume 2 in this series: Management/Mismanagement Styles op. cit.) A leader is one who excels at two or more roles, one of which must be (I)ntegration, while also meeting the threshold needs of the other roles and there are many leadership styles too like the Small League Coach (PaeI), etc. Whether a leadership style is functional will depend on the task on hand. When one or more of the (PAEI) roles is not being performed at all (signified by a dash in the code), a corresponding mismanagement style emerges: A (P---) is a mismanager whom I call a Lone Ranger; an (-A--) is a Bureaucrat; an (--E-) is an Arsonist, and an (---I) a SuperFollower. (For a description of these styles, read Chapter 4 of this book. For a more detailed discussion, read the second book in this series, Management/Mismanagement Styles op. cit.) The (PAEI) code can also be applied beyond codifying behavior or style. For example, the (PAEI) roles develop and decay in a predictable sequence in the lifecycle of any organization. Because not all roles are present and fully developed from start-up, and because over time some roles become more pronounced and other roles less pronounced, a typical pattern of problems will be created, which can be foreseen and prevented. Knowing which roles will be missing or weak at any point in time allows us to predict which problems the organization is going to have and what it needs to do to accelerate its development or slow its decay. It tells us which roles will be needed in the next stage of the lifecycle, and thus which leadership styles will be most effective. There is a reason why certain leadership styles are preferred at one stage in the lifecycle of an organization and rejected in another.[4.] In other words, once you understand the pattern, you practically have a crystal ball in your hands: The current problems indicate where your organization is in its lifecycle, and based on that you can predict your next generation of problems. You have a tool to identify what is normal and what is abnormal at each stage of the lifecycle. Its analogous to the lifecycle of human beings: We expect a baby to cry a lot and wet itself, but if a 45-year-old person is doing that, we know we have a problemunless he is a venture capitalist. (I once asked a VC who invested in dot.com companies: How do you sleep at night? Like a baby, he answered. When I expressed surprise, he explained: Sleep for two hours, cry the rest of the night!) For how the (PAEI) roles grow and change over the life cycle of an organization and thus how to predict your future problems today and what to do about it, please see the three volumes of Corporate Lifecycles: Volume 1: How Organizations Grow, Age, and Die; Volume 2: Why Organizations Grow, Age, and Die and Volume 3: How to Manage Balanced Growth and Rejuvenate Organizations (Published by Adizes Institute 2004, Third expanded edition of Corporate Lifecycles first published by Prentice Hall, 1999). Over the years I have perfected tools that develop and nurture all four roles, enabling organizations to manage in periods of rapid and turbulent change while avoiding the dysfunctional and destructive managerial diseases that usually come with the territory. For example, if an organization is losing market share, that means it is being ineffective in the short-term, or lacks the (P) role. Once you know how to develop (P), you can cure the problem. For thirty years, I have used these (PAEI) tools, among other tools that are covered in my other books, in my consulting work in companies around the globe, as have my associates,

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who are trained and certified in this methodology, and we have solved problems in companies worldwide. It is a tested methodology for analyzing and solving problems and predicting behavior, for leading sustainable, accelerated growth or organizational rejuvenation without destructive conflict. I have coached one company to grow from $12 million to $1.5 billion in sales, and another to grow from $150 million to $4 billion in sales without diluting ownership.[5.] Lets talk about the four roles in detail and the four basic managerial styles that correspond to those roles.[4.]

See www.adizes.com for testimonials about the Adizes Institute.

A RAISON DETREThe first and most important role that management must perform in any organization is to (P)roduce the desired results for which the company or unit exists. What does this mean? Every organization has its raison detre; it is not put together just to be put together. Some sociologists claim that the purpose of organizations is to survive. To

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me, thats not normal; thats a pathological phenomenon, like cancer. An organization must have a larger mission than survival. So what is the purpose of a given organizations existence? Lets use an analogy: Five friends get together on a Friday night and have some beers. As they are drinking, someone suggests they go on a hike to the nearby lake the next morning. The rest of the group enthusiastically agrees. The next day, the five friends follow a mountain path that leads to the lake. Its a very narrow path so they must walk single file. They have been walking on the path for hours. Theyre singing, whistling, joking, and laughing. This group can be described as an organization; in other words, it has common goals that continually change and progress: The first goal was to get together Friday night. The second was to have some beers. And the latest is to hike to the lake. A social scientist or psychologist would have a field day studying this primary group: Their interactions, their style, their leadership, how they communicate. But there is no management in this group until this group of five people comes across a big rock thats blocking the path and that none of them individually can lift. Organizational management is born when a task evolves that cannot be performed by one person alone. That task, once defined, will drive the behaviorthe interactions and the interdependenciesof the group. To lift that rock, they need to plan and organize and control and delegate; in other words, make decisions. They might decide to move the rock, or they might decide to camp out right there instead of trying to reach the lake, or they may go back home and have a barbecue. Can an organization exist without management? In my consulting role, I have come across such organizations. But they are rather stressed places, where people continuously argue about why they are together or what their common goal is. There are interdependencies, but they are not managed; those interdependencies just happen organically. There are people who get paid as managersbut the organization is not being managed; it is like a plane flying without a pilot, and how it flies depends on the winds and the weather. There can be no management without a task that requires interdependency, whether it is in the immediate term, the intermediate term (in which case it is called an objective)? the long term (which is called a goal) or when it is more spiritual and continuous in nature (a mission). But no matter which word you use, there must always be a telos (the Greek word meaning a purpose) that cannot be achieved by one person alone. This, to me, is the first major difference between social scientists and management practitioners. We have a rock to move. Its not enough to talk about interactions and communications: Why does this organization exist? Why are we communicating? What for? Sometimes, reading books on social psychology, you start to wonder: All of this interaction, but what is the rock that they are moving? I have seen organizations whose managers remind me of a group of hikers, sitting next to the rock and complaining that they cannot get to the lake. But no one is lifting a finger to move the rock. So, what is the rock of a business organization? Why does a business organization exist? What result is it supposed to give you? The typical answer, particularly from students of economics and those who distrust big business, is: Profit!!!!! But guess what? Profit is not the answer. We probably all know organizations that are extremely profitable and yet are going bankruptnot in spite of but because of. In other words, constantly thinking about profit instead of about what the client needs is as futile as saying, The purpose of my existence is to be happy. If, every morning, you wake up and ask yourself, Am I happy? you will soon become quite miserable. Playing tennis is another analogy. If you want to win, you dont look at the Scoreboard all the time; you watch the ball. If you hit the ball effectively, efficiently and repetitively, you will win. In other words: I know you want to go to the lake (profit), but for now, you need to focus on moving the rock.

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And what is the rock? Instead of profit, you must concentrate on this: Who needs this organization? Who will cry if you die? Who needs you? What for? And these are not the stakeholders. Stakeholders are those you have to take into account and hold at bay or treat them right and satisfy their needs so that you can fulfill the purpose of your existence which is to satisfy your clients needs. Because unless you produce that for which your clients come to you, you are not going to be effective and if you do not fulfil your effectiveness efficiently, youre not going to be profitable. For me, profit is a result of good management, not the purpose of it. If you perform all four roles, profit will occur in the short and long run. Profit in a competitive market economy is how an organization adds value. Let me explain. When people buy a product or a service in a competitive market, they are telling you, literally in dollars and cents, how much it is worth to them to satisfy a particular need. But to (P)roduce that desired service or product, the company has to spend money. So when the companys costs to satisfy a need are lower than the price the client is willing to pay and has a choice where to spend it, there is profit which can be seen also as a value added, because the company has (P)roduced that service or product for less than its perceived value to the client. Thus, if a company (P)s and (A)s effectively and efficiently, it will be profitable and add value to the societyin the short run. (Note that I repetitively said that this is true only in a competitive environment where the clients have a choice) So what, then, is the purpose for which your organization exists? What must your organization (P)roduce? The answer is: Client satisfaction. That is the (P) function of every organization. The (A) function is to make it profitable. Please note that I did not say customer satisfaction. Customers are the private case of the sales department; they are external. But every manager has clients, which are either external or internal. If your accounting department does not satisfy the needs of its client for informationthe operations people or the marketing department, for examplethere is a problem, isnt there? Clients are all those people whose needs the organization was established to satisfy. And how do you measure satisfaction? By repetitive sales! Are they coming back? Would they come back if they had a choice? Marketing people use research to find out what their customers (clients) need, how they need it, when and at what price, etc. The same applies to any manager of production, accounting, or safety. First, find out who your clients are, then find out what they need, and then go and do what needs to be done and do it efficiently. This applies to a marriage, too. Who is the client of each spouse? If your spouse is continually coming home late or not at all, there must be a reason. If the kids, who are also clients of the entity called family, leave and rarely come back, there must be a reason. Your organization is effective in the short run if it provides for the present needs for which it existsverified by the fact that your clients are coming back even if they could get the same or similar services elsewhere.

THE (P)RODUCER(Paei) STYLE

Lets describe the style of a manager who excels in (P)roviding for the needs of the clients, thus (P)roducing the expected results while also meeting the threshold needs of

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(A)dministration, (E)ntrepreneurship, and (I)ntegration. This manager, whose code is (Paei), I call a (P)roducer, or (P) type. As a manager, in order to (P)roduce, you must possess two qualities. The first quality is you must know what your clients need and why they are coming to you. What is your particular niche in the marketplace? Secondvery importantyou must know something about the technology of how to provide that for which they come to you. Open Throughput Output table as spreadshe et Input The roles Make the organization In the

(P)rovides Functional; short run for client thus effective needs Thus, its not true to say, To manage is to manage is to manage is to manageyou can manage anything if you are a professional manager. That is dangerously over-simplified, unless we add three more words: After some time. And what do you do during that time? You try to learn the peculiarities of the organization that you are managing. Because there are no two rocks alike in the world. Any time you move from one branch to another in a bankthe same bank!the rock is going to be different. The clients have particular needsthey might need parking or drivethrough banking, which your previous workplace did not have. Even if you move from one department to another in the same organization, the rock is going to be different. So what does a good manager do before he starts doing anything else? He learns the rock. He learns what it is that his particular clients come to him for. Organizations are like men and womeneverybody is different. You cannot treat them all alike. You have to know the particularities of what you are trying to manage, so that you can (P)roduce results, or (P)rovide for the expected needs. But thats not enough. Some people, despite being very knowledgeable, do not (P)roduce results. They can give you a beautiful report, they know the technology, their judgment is correctbut they lack what psychologists call achievement motivationthe urge to get in there and do it! Dont just talk about itdo it! This is the desire to see the finalization of a task, like a salesman who wont stop selling until he has a signature on the dotted line. They wont let go until the need of the client is satisfied or the task is done and completed. For me, then, a manager, a (P)roducer of results, must be a knowledgeable achiever

RUNNING THE RAILROAD

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Is (P)roducing results sufficient? No. What happens when the manager is an excellent (P)roducer of results: A knowledgeable achiever? This person is so good, productive, diligent, reliable, that we reward him with a promotion. But now, he is no longer merely a (P)roducer; he has to work with five or six or more other people, he must coordinate and delegate and control and oversee. Instead of (P)roducing by himself, he must make the system (P)roduce results. And that is a different task altogether. Thats why we need another role: To (A)dminister. The (A) role is indispensable for good management. It is the role of (A)dministration to pay attention to details, to systematize the (P)roduction process so that a wheel does not have to be reinvented each time a wheel is needed, and to ensure that staff follows those systems and routines. (A)dministration ensures that the organization does what it was intended to doefficiently. It moves the organization up the learning curve so it can capitalize on its memory and experience. It analyzes successes and programs them so that they can be repeated. If you (P)roduce results, your organization will be effective. If you also (A)dminister, your organization will be efficient. If you (P) and (A), the organization will be both effective and efficient in the short run. And if it is effective and efficient in the short run, it will be profitable in the short run, if that is how you measure success. Open table as spreadsheet Input The roles (P)rovides for client needs (A)dminister Throughput Output

Make the organization Functional; thus effective

In the short run

Systematized; short run thus efficient If an individual is (P)roductive but lacks (A), he will be very disorganized. He will work hard harder than necessarybut not intelligently He will waste a lot of time reinventing the wheel. The same applies to organizations. There are organizations that satisfy their clients needs but lack an organized (A)dministration. They have no system. Their management of the supply chain is atrocious; their salary administration is a patchwork of individual agreements; their recruitment processes and policies are haphazard. This company will be effective but inefficient. It will have growing sales with declining profits. An American analogy for management is running the railroad. How do we run a railroad? First of all, we need the railroad engineer to (P)roduce results: Thats transportation. The engineer takes the train from station A to station B. Then we need someone to manage the engineers, making sure they get the train from station A to station B correctly and on time. The latter role, in companies, is called Operations. That is the (P) function of the railroad organization, which should be managed by a person with a strong (P) style. If the railroad engineer does a bad job or if Operations does not perform, then the organization is going to be mismanaged and ineffective. The trains will not run; the need for transportation will not be satisfied. But to run a profitable railroad organization, we also need supplies and money, collection and payment, and universally communicated timetables to get the right train to the right town at the designated time. Budgets must be adhered to, costs must be controlled, systems developed, and their implementation supervised. All this is the role of (A)dministration, which should be managed by a person whose style is compatible with the needs of this role.

THE (A)DMINISTRATOR(pAei) STYLE

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This person has the capability and natural inclination to pay attention to detail, especially details of implementation. He is methodical and likes his environment to be well thoughtout and organized. He thinks in a linear fashion. When you have a business ideaespecially a crazy one or one you are afraid might be crazyyou go to this manager to help cool your enthusiasm. She will think things through for you. She will ask you questions you hadnt thought of. She will see all the pitfalls you didnt consider. Give her a business plan to read and she will tear it apart. And you will be grateful! It costs less and hurts less in the long run if problems are anticipated; either you can find ways to solve them before they become crises, or you can reject the plan as unworkable. A good Administrator, or (A) type, can foresee the problems inherent in an idea. People have told me, about such executives, He can find a hair in an egg while it is still in its shell, and He can smell a rat a mile away. In psychological terms, the (A) role is best served by a person with a need to control; while the (P) role requires a person with the need to achieve. If you trust him, then if your idea passes his scrutiny, you know you can do it. And should do it. And if it does not pass his scrutiny and you decide to do it anyway, at least you know ahead of time what risks you are taking. A good (A)dministrator always knows what is going on. He cannot sleep if he doesnt know what is going on. He keeps track of the details. He is well organized and concerned with follow-up and implementation. He has an excellent memory (or is fortified by systems, which means he does not have to rely only on his memory), and he works to see that the system operates as it was designed to operate. The (A)dministrator is good at worrying, but he worries appropriately. He worries about precision, about integrity of information. He worries that the organization will lose its memory, its database, or its intellectual property. A good (A)dministrator is indispensable to a growing organization. A young organization usually grows too fast and in too many directions, and can easily trip and fall on its face (i.e., go bankrupt) without even realizing that its been bankrupt for quite a while. The good (A)dministrator protects your back. He keeps the gateway to the castle closed so that the enemychaoscannot enter. What he does not do is (P)roduce that for which the organization exists. If you look up the word administration in a thesaurus, you will find that its synonym is to serve. (A)dministration serves those who (P)roduce; i.e., meet the needs of their clients. One (A)dministers for someone, for something. In public service organizations, government (A)dministers for the society, and the people who work in such organizations are called public (A)dministrators, or public servants. The need they (P)rovide fortheir (P)is (A)dministration; if the job is to be done efficiently, however, they must also (P)rovide (A).[6.] A lawyer who has a (pAei) style is the one you want to write up your contract. But do not ask him to be your trial lawyer. He will lose in court. He can write an agreement that is faultless, but if you have to sue, youre much better off finding a creative, (paEi) lawyer who can interpret night as day and turn a liability into an asset. The same is true for accountants. I need two: One to advise me on my taxesthe (paEi) typeand the other to file my taxesthe (pAei) type. If the (E) files the taxes, I might find myself in trouble for creative accounting. If the (A) plans my taxes, I will probably pay more than necessary. Let us turn now to the (E)ntrepreneuring role.[6.]

In government, the (P) and (A) functions are the same. In other words, the (A) actually (P)roduces what the organization exists for. Take a government agency that issues licenses or monitors the health and safety of food service establishments. Its (P) function is to (A). Of course, this organization will have its traditional (A) roles too: To organize, systematize, and monitor the system.

SEEING THROUGH THE FOG

Are (P)roducing and (A)dministrating enough? No. Every manager should be able to (A)dminister. But is the reverse also true? Is every (A)dministrator a manager? No. Beyond (A)dministering, an organization must also be capable of planning what work to do next,

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deciding what direction it should take as it acts to address change. This is the role of (E)ntrepreneuring. The (E) role analyzes changes in the environment as they affect the organization. Whereas (A) involves systemizing and implementing plans that have already been determined, (E) must generate a plan of action for what the organization should start doing now because planning is not what you are going to do tomorrow. It is what you should be doing today in light of what you expect tomorrow to be. A metaphor I find useful for the (E) role is the ability to see through the fog. The creative person will look into the fog and see pieces of information appearing and disappearing, and all at once something clicks. He sees a big ear, then a big trunk, then one big leg, and he concludes: Aha! There is an elephant there. The non-creative person waits until the fog lifts, until the sun is shining and its totally clear. Then he will go and touch the elephant, and even smell the elephant. And still he is not quite convinced: OK, maybe its an elephant! This person has not added any information or created anything, while the creative person, using his imagination, has filled in the blanks in the information fog. Returning to the railroad analogy I used above, it is the (E) role to determine which stations to close and which new stations to open; whether to add or subtract the number of cars on each line; and to decide how often the train should stop at each station. It is the (E), in other words, who will guide the organization as it deals with changing realities. (E)ntrepreneurship is not confined to the business world. In addition to business (E)ntrepreneurs, who try to exploit the monetary opportunities of the market, there are social (E)ntrepreneurs, who initiate cultural and political change, and educational and artistic (E)ntrepreneurs, who satisfy aesthetic needs and generate new ones. All are of tremendous value to society. Since change is inevitable and constant, the (E)ntrepreneurial role is also essential to good management. It makes the organization effective in the long run. If there is no one to perform the (E)ntrepreneurial role in an organization, that organization will eventually lag behind its more creative and proactive competitors

THE CREATIVE CONTRIBUTOR(paEi)

In my book How to Solve the Mismanagement Crisis,[7.] in which I first presented the (PAEI) model, I identified the person who performs the (E) role, whose code is (paEi), as an (E)ntrepreneur. That book was written almost 30 years ago. Since then, in studying these codes in greater depth, I have changed my mind.

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A (paEi) is not quite an (E)ntrepreneur. To be an (E)ntrepreneur, who creates organizations and develops them, one must be strong in the (P) role as well. A focus on (E) alone is not enough. A person who focuses mostly on (E), whose (P) orientation is adequate but not strong(p) I now call a Creative Contributor. This is the manager who has plenty of ideassome good, some bad. But he has lots of them, sometimes non-stop. He is like the kid in school whose hand goes up even before he hears the end of the question. He is the person in a meeting who does the most talking. Whatever solution is proposed, he has another option. This manager adds lots of energy to meetings. He is not merely focused on what the discussion is about and what the goal is. He is not without some sensitivity to what others are saying, and he is capable of paying attention to details. But without a strong (P) focus, he is not the person to say: Let me lead, let me do it. Without a strong (P), he will be constantly moving from one idea to the next, without finishing anything. He will not be capable of building an organization.[7.]

THE (E)NTREPRENEUR(PaEi)To be (E)ntrepreneurial, a manager must have two major characteristics. He must first of all be creative, able to visualize new directions and devise strategies for adapting the organization to a perpetually changing environment. He must have a feel for the organizations strengths and weaknesses, and the imagination and courage to identify strategies in response to such changes.[8.]

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And yet being creative is not sufficient. Some people are very creative but are not (E)ntrepreneurs. Faculty members at business schools often fit this profile. Why? Because they are only creative. They may even be prolific in their creativity, as measured by the number of articles they publish. And the focus of their creativity may even be (E)ntrepreneurship, or how to make money. Nevertheless, if they do not have the second characteristic I believe is necessary for an (E)ntrepreneur the willingness to proact, to walk into the fog, to take risks, to follow a vision - they cannot be (E)ntrepreneurs. They will not succeed at making money even if they wrote the book on how to do it. It is risky to follow a dream in the fog. There may be dangerous pitfalls; and when you finally get to your destination, you may find that where you are is not where you wanted to be. So an (E)ntrepreneur not only has a vision; he is also willing and able to risk what he has in order to get what he wants. Both qualities, creativity and the willingness to take risks, are necessary for (E)nrepreneurship. If a manager is willing to take risks but lacks creativity, he might be more at ease in a Las Vegas casino than in the corporate world. If he is creative but unable to take risks, he may end up as a staff person, a consultant, or a business professor someone who can identify a course of action but does not undertake it himself. The (E)ntrepreneur knows what he wants and why he wants it. He is creativebut in the service of a goal. He has an idea, a purpose, and he can translate that idea into reachable and achievable outcomes. His creativity is focused on how to make that outcome a reality. He is a no-nonsense person, creative and focused. Ideas without results annoy him, and results that are not born out of big ideas are a waste of time. The focus of the (E) role is on what needs to be done next. What are the emerging needs; who are the next generation of clients that the organization will have to satisfy? Thus, the (E) role, if fulfilled, makes the organization effective in the long run. Open table as spreadsheet Input The roles (P)rovides for client needs (A)dminister (E)ntrepreneur Throughput Output

GETTING RELIGIONIn the analogy of the five friends who went hiking to a lake, their friendship and sense of belonging expressed itself in a need to do something together. First, that need was satisfied by drinking beer; then by hiking to a lake; then by working together either to lift the rock or to come up with another plan.

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The process of identifying a new way to satisfy that ultimate purposegoing on a hike rather than drinking beerwas (E)ntrepreneuring, the (E) role. The organizing of the hike where to meet, what time, who would bring the picnic basketbelonged to the (A) role, or (A)dministering. The actual act of drinking beer, hiking to the lake, or removing the rock from the paththe act of doing whatever satisfied the purpose of the interrelationship at that momentwas (P)roducing, the (P) role. But what is the common denominator in all these activities? Why are these people drinking beer together, going on a hike together, lifting the rock together, in the first place? Physiological studies show that humans need to interrelate. What is the worst punishment in a prison? Solitary confinement. Come to think of it, imprisonment in itself is a partial isolation and thus a punishment. The role of developing and nurturing the need to affiliate is what makes an organization viable and thus effective in the long run. What would happen if your organization were managed by an executive who was an outstanding (P), (A), and (E)? This person is a knowledgeable, achievement-oriented, taskoriented, effective, no-nonsense (P)roducer, as well as an outstanding (A)dministrator running a tight ship: Everything is systematic and well organized, correctly done at the right time. In other words, the organization is effective and efficient. In addition, this executive is an outstanding (E)ntrepreneur, constantly adapting and improving the organization so that it is really moving and adjusting to the changing environment. Now, what happens to the organization when this manager dies? The organization also dies. Why? Because the (P), (A), and (E) roles are necessary, but they are not sufficient if the organization is to be effective and efficient in the long run. Organizations should be managed so that they can survive for thousands of years. Look at the Catholic Church, for example. It has existed for two thousand years and it could go for another two thousand. Why? Because it has established a set of values that each individual in the organization identifies with. To do that, you must have (I)ntegration. (I)ntegration means uniting people to develop agreement and build group support for ideas and their implementation.[9.] If the role of (I)ntegration is performed well, people will learn to work as a team instead of as individuals, able to compensate for any task that happens to be missing or deficient. (I)ntegration builds a climate, a system of ethics and behavior, that encourages everyone to work together so that no one is indispensable. To (I)ntegrate means to change the consciousness of the organization from mechanistic to organic. What does this mean? To be mechanistic is to care only for your own interests while I care only for mine. Look at a chair. If one of the legs breaks, do the other legs care about it? No, thats the broken legs problem. If the four legs were internally interdependenti.e., organicthen if one leg broke, the other three could realign themselves into a tripod shape to maintain the chairs functionality. But there is no internal interdependency, no organic relationship among the parts of the chair. Thus, when its functionality is damaged, it is dependent on external intervention for repair. Something similar happens in mechanistically oriented organizations. Lets say there is a problem with sales. The company is going broke. The (P)roduction department says, Thats not my problem. Thats a sales problem. In reality, however, there may be something (P)roduction could do differently that would save the company. In comparison look at your hand. If one finger breaks, your whole body feels it. There is empathy. And not only that: When one finger breaks, the other four fingers on that hand will try to compensate for the loss. That is organic consciousness. There is interdependency, there is cooperation; its synergetic instead of being individualistic, independent, and frequently adversarial. Yes, but in the case of a hand, the fingers all share the same head, a cynic might argue. Not always. What if the finger that broke belongs to your four-year-old son? Its not your finger. So why are you in pain and unable to focus? Because it belongs to someone you love, and his pain is your pain.

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So (I)ntegration does not have to be physical. It can be emotional and/or spiritual. It is driven by a sense of belonging and affiliation. When your kids are fighting, you dont always solve their problems for them, do you? Why not? Because you are trying to promote just that sense of interdependency and affiliation. You might say, Hey, youre family; youre supposed to be helping each other. Im not going to be here forever. You must solve your own problems. Lets say you and your family are packing up the car for an outing, and you find your son sitting in the car and waiting. Why arent you helping? you ask him. My stuff is already in, he responds. Get your rear end moving and help the family!! youd probably shout. You are not alone here. Your job is done when the whole familys job is done. Right? A family is more than a group of people; a hand is more than five fingers. There is a sense of interdependence fostered by common values and vision, among other variables. (I)ntegration involves creating and nurturing a culture of mutual trust and respect and thus cooperation; it involves the leader making himself dispensable so that the group can continue to function if anything happens to himor any other individual member. Look at a sports team. If you put together a team of stars, each from a different team, who have never played or trained together, and play them against an above-average team thats been playing together for a long time, who would probably win the first game? Its likely that the above-average team would win. Why? Because the star team has not yet developed its team consciousness; its members cannot yet predict: If he does that, I can back him up by doing this. That sense of cooperating to reach a common goal is what we mean by teamwork. (I)ntegration turns individual (E)ntrepreneurship into group (E)ntrepreneurship. If a manager does not (I)ntegrate, does not nourish group (E)ntrepreneurship, then in extreme cases the group will be unable to initiate action or determine goals in his absence. Thus, (I)ntegration is a necessary component of good management. Companies that rely on any one individual for continuous success in their operations inevitably will face a crisis if that individual leaves or dies. Even organizations that have been managed by a (PAE-)the dash in the code signifying that the (I) role is missing or deficientwill find themselves in trouble if that manager leaves before a team feelingan esprit de corps around an effective course of actionhas been developed. Since an organizations life span should be longer than the life of any individual, effective long-range continuity depends on building a team of people who understand, trust, and respect each other, and who complement each others abilities. (I)ntegration creates that effect. When there is no (I)ntegration taking place, no one is focused primarily on the companys long-range, holistic interests. Instead, everybody is looking out for himself, often at the companys expense. The stockholders are trying to milk the company. Management is trying to get maximum rewards for itself, with stock options, golden parachutes, and endless fringe benefits. Labor is campaigning for the best salaries and job security. Among all of these competing interests, its possible to arrive at a working consensus in which everyone is getting his interests satisfied while the company is actually going bankrupt. That is what is said about certain developing countries: Rich people, poor country. When I find a situation like this in the organizations I coach, I often dramatize the dilemma by bringing an empty chair to the table. I place the company name on the front of the chair and ask, If someone were sitting in that chair, what would he say? What does this company want? When I let the participants play out that scenario, I hear voices that have previously been silent. In this exercise, I am playing the (I)ntegrating role. So, although (P) appears to be the purpose of our existenceto satisfy our clients needs it is in fact only the immediate, short-term purpose. What is our continuous endless purpose? To satisfy our need to interrelate. I repeat: Interrelating is the ultimate purpose of our existence. We are social animals. We need each other, period. We even keep dogs or cats sometime for no other reason than because we need to be needed, to interrelate. In the United States, dogs are trained to visit patients in hospitals; some studies have shown that a dogs attention and affection can speed up the healing process. There is nothing in this world that doesnt exist to serve something else by functionally interrelating to it. If it serves only itself, then it is a cancer and serves death.

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The pen I write with is useless if it does not leave a mark on paper. Breathing has no meaning unless the oxygen feeds my body. Nothing in itself is functional; everything is functional in relation to something else. The ultimate reason any system exists is (I)ntegration, the (I) role. Indeed, managers with the ability to perform that role have the potential to go beyond good management and become leaders.[9.]

On the role of (I)ntegration, see Lawrence, P.R., and J.W. Lorsch, New Managerial Job: The (I)ntegrator, Harvard Business Review, 45 (November 1967), pp. 14251.

THE INTEGRATOR(paeI) STYLE

There are two types of (I)ntegrationpassive and activeand three directions: Upward, lateral, and downward. A passive (I)ntegrator will (I)ntegrate himself into a group of people. An active (I)ntegrator can (I)ntegrate a group of people among themselves. Because in management, (I)ntegration must be active, we will concern ourselves here only with active (I)ntegration. Upward (I)ntegration is the ability to (I)ntegrate people who are higher in status, authority, rank, and so on. Lateral (I)ntegration is the ability to develop peers into a cohesive group. Downward (I)ntegration provides leadership by establishing cohesion among subordinates.

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A very effective lateral (I)ntegrator may function poorly as a downward (I)ntegrator, tending to be arrogant with subordinates. In fact, it is unusual for a person to be an excellent (I)ntegrator in all directions.[10.] Lets talk about the characteristics that a good (I)ntegrator brings to the organization. Perhaps surprisingly, the (I)ntegrator is the most creative of all the management types, since he must make decisions from a more diffused and less structured database. (I)ntegrating is even less programmable than (E)ntrepreneuring, because (E)ntrepreneuring does not necessarily deal with people, whereas (I)ntegrating involves uniting individuals with diverse interests and strengths behind a group decision. In (I)ntegrating (E)ntrepreneurs, one has the additional burden of forging their individual creativities into a cohesive unity, to develop group risk-taking out of individual risk-taking, to fuse an individual sense of responsibility into a group sense of responsibility. The (I)ntegrator clarifies issues by finding the common threads of deepnot just superficial agreement, and by assimilating contrasting values, assumptions, and expectations. A successful (I)ntegrator also must make himself dispensable. His subordinates must be trained to be capable of replacing him. Ideally, in a cohesive group almost any member should be able to lead. To take a military example, if any soldier in a squad can take the squad leaders place and be accepted when the leader is killed, this demonstrates that the leader was a good (I)ntegrator. If the squad scatters when the leader is killed, then the (I)ntegration of the unit was insufficient, although the leader may have been a competent commander in other respects. The (I)ntegrator is sensitive to others (i.e., empathetic), and he is capable of deductive thinking (i.e., able to infer what people really want to say from what they do say). He has few ego problems of his own, which enables him to hear and respond to other peoples expectations, problems, and needs rather than his own. The late Juscelino Kubitschek, former president of Brazil and founder of Brasilia, was such a leader. When asked whether he was for or against a certain political program, he replied: I am neither for nor against it: I am above it.[10.]

The (I) component, as has been pointed out, is essential to good management at all levels, because the manager must work through others to achieve organizational goals. Where management has succeeded in (I)ntegrating the individual members of an organization into a group, we may expect greater identification with the organization, more job satisfaction, and better performance. The importance of interpersonal relationships for the success of organizations has been repeatedly demonstrated in the literature. Chris Argyris found that the worker s skill and pride in his work were directly related to his on-the-job friendships. See Argyris, The Fusion of an Individual with the Organization, American Sociological Review, 19 (1954), pp. 14567; and Personality vs. Organization, Organizational Dynamics, 3 (1974) no. 2, pp. 217. A similar association between level of competence and degree of (I)ntegration with the organization was reported by Peter M.Blau in a study of law enforcement agents. See Blau, Patterns of Interaction among a Group of Officials in a Government Agency, Human Relations, 7 (1954), pp. 33748.

THE (I) ROLE IN LEADERSHIP

The (I)ntegrator is unique in that he not only provides for future organizational continuity, he also enables the organization to function smoothly in the pesent. His role is essential for success, both in the short run and in te long run. Finally, his is the one role that must be present in order for leadership to occur.

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Open table as spreadsheet Input The roles (P)rovides for client needs (A)dminister

In the short run short run long run

(E)ntrepreneur (I)ntegrate

organic; long run efficient You can be a good manager even without (I). Managers can be strong in two or even three roles(PAei), (PaEi), (pAEi), (PAEi)but unless one of them is (I)ntegrating, they will not be leaders. For leadership to occur, the (I) role must enhance whatever other roles a manager excels at performing. (See Chapter 11 for a more detailed description of leadership.)

SUMMING UP THE FUNCTIONALIST VIEW

Before we continue, let me summarize the points I have made so far:

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Management is defined as the process that makes organizations become and remain effective and efficient, now and in the future. These, I suggest, are the goals of every organization, regardless of how it measures its success, regardless of technology, size, and culture. The organization will achieve these goals if four roles are performed well: (P)roviding for the clients expected needs, (A)dministering, (E)ntrepreneuring, and (I)ntegratingor (PAEI). In other words, the organization must be results-oriented (P); it must be flexible and adapt well to change (E); but that flexibility must be controllable and generate predictable results (A). Finally, its system must be self-adaptive (I), so that no outside corrective action is called for. The role of management, then, is to perform those four roles - because they do not happen by themselves. Thus, to manage means to perform any or all of those four roles, regardless of an individuals title or position in the hierarchyor whether he is even on the payroll. Now that we have defined management and know what we are looking for, we should be well on our way toward finding the ideal manager, right? Wrong. But we are closer to finding out why the ideal manager does not and cannot exist.

Chapter 3: What Causes Mismanagement?

PROBLEM: Now that weve defined management, why cant we find the ideal manager?

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THE MYTH OF THE PERFECT MANAGER

We have established that there are four roles of management; each of them is necessary and together they are sufficient for good management. If you (P)roduce resultsi.e., satisfy the needs of your clients for which your organization existsand you (A)dminister, youll have an effective and efficient organization in the short run; if you (E)ntrepreneur and (I)ntegrate, your organization will be effective and efficient in the long run. If you do all four, the organization will be profitableif that is how you measure your successboth in the short and the long run. If youre not in the for-profit business, then you will achieve whatever short- and long-term results youre looking for: Service, political survival, whatever. So far, so good. Now the bad news. Its not so simple. While one manager may excel at planning (E for P), another may excel in organizing (A for P), a third in motivating (I for E or P), and so on. But never do you find a manager who excels at all four rolesin other words, a perfect (PAEI) manager. He or she doesnt exist. Why not? This question reminds me of a joke: A preacher, in his sermon one day, said, There is no such thing as a perfect man. I can prove it to you. Anyone who has ever known a perfect man, please stand up. Nobody stood up. Anyone who has ever known a perfect woman, please stand up, the preacher said. One demure little woman stood up. Did you really know an absolutely perfect woman? the preacher asked, amazed. I didnt know her personally, the old woman replied, but I have heard a great deal about her. She was my husbands late first wife. If someone is perfect, she must be dead. And the truth is, she was never perfect. We have simply forgotten all her deficiencies. In one of his books, the guru Osho writes that he concluded that people believed he was dead. Why? he was asked. Because they are only saying good things about me!

THE IMPOSSIBLE DREAM

In other words, one big reason that the perfect, all-encompassing (PAEI) manager does not exist is that nothing is ever perfect when it is subject to changeor, to put it more bluntly, is alive. Nothing is perfect because nothing is static. There is a lifecycle to everything. One does not parent a baby the same way one would parent a 40year-old son,

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obviously. Treating a baby as if it were an adult would physically endanger him; babying a 40-year-old would psychologically destroy him. The parenting style has to change as our children change; life does not allow us to stay in one place. We change, either for the better or for the worse. And we do not necessarily change perfectly to reflect the needs that we must respond to. There is no perfect parent, no perfect leader, and for that matter no perfect flower. Something may be perfect for the moment or, to paraphrase Andy Warhol, at some point in our lives we might each achieve our fifteen minutes of perfection. But conditions change, and the functional synchronization of what we do with what must be done cannot remain perfect forever.[1.] It may seem contradictory to say that everyone is a good leader and no one is a good leader, but it actually makes sense in the following context: Everyone is a good leader (in some situations), and no one is a good leader (forever, under all conditions). The closest to perfection a person ever comes is when he fills out a job application form. STANLEY J.RANDALL Peter Drucker has recognized the complexity of the managerial task. A peculiar characteristic of top management is that it requires a diversity of capabilities and, above all, temperaments, he writes.[2.] I will add, in italics, my interpretations of the roles he points out. It requires the capacity to analyze, to think, to weigh alternatives (A), and to harmonize dissent (I). But it also requires the capacity for quick and decisive action (P), for boldness and for intuitive courage (E). It requires being at home with abstract ideas and concepts (E), calculations and figures (A). It also requires perception of people, human awareness, empathy, and an altogether lively interest and respect for people (I). Some tasks demand that a man workalone (P). Others are tasks of representation and ceremonial outside tasks, that require enjoyment of crowds and protocol (such as the task of a politician) (EI). The top management tasks, Drucker continues, require at least four different kinds of human being. Drucker identifies them as the thought man (A), the action man (P), the people man (I), and the front man (E). These are, of course, analogous to the styles of the (PAEI) model. Although Drucker was referring only to top management, I believe that all management positions within an organization require all four roles, although the balance of the roles shifts as you move through an organization. Top management in America, for example, must exercise a lot of the (E) role. But the (I) role, in American companies, is often consigned to the Human Resources department, where it is neglected, because HR managers are inundated with (A)dministrative tasks and record-keeping that not only keeps them too busy to concentrate on (I)ntegrating, but also undermine their credibility as (I)ntegrators. Meanwhile, (P)roduction is delegated all the way down to the workers or the people on the line, the (P)-eons. They are not asked for their opinionsno (E)and if they try to (I)ntegrate they might be seen as threatening managements authority by trying to unionize. Yet, at any level, managers must perform all four roles simultaneously and with the same degree of perfection. This makes the textbook manager a necessityand an impossibility at all managerial levels. For example, a foreperson needs to be knowledgeable (P); to have administrative capabilities (A); to be flexible, adaptive, and innovative (E); and to relate well to people (I). But how many forepersons actually have all of these qualifications? According to Drucker, Those four temperaments are almost never found in the same person.[3.][1.]

FOUR ROLES IN ETERNAL CONFLICT

Why not? Becauseand here is the second reason why no manager can be perfectthe managerial roles undermine each others performance at a point in time.

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Although Drucker concluded that more than one style is necessary to manage any organization, he did not go beyond that thought to analyze how the different styles might interact. And that is the gap I am trying to fill here. Let us look more closely at the incompatibility of roles. We all know managers who are brilliant at conceptualizing plans and ideas but not very good at monitoring the details of implementation; or who are sensitive, empathic, and good at (I)ntegration, but just cant seem to make hard decisions. The explanation is simple: The four roles are not mutually exclusive, but they are incompatible in the short run and thus mutually inhibitive: In other words, the ability to excel at one of the (PAEI) roles is likely to impede ones ability to perform another. Everybody is ignorant, only on different subjects. WILL ROGERS For example, (P)roducing and (E)ntrepreneuring are incompatible. (P) and (E) are in conflict because (P) requires short-term feedback, whereas (E) takes time to develop and looks to the long term for feedback. How many times have you said, Im working so hard, I have no time to think. In other words, moving the rock, or satisfying present demands, is so overwhelming that you have no time to think about future opportunities. But while youve been sweating, pushing that rock out of your path, someone else may have built a big highway close by. So (P) actually endangers (E), because if you work very hard, day and night, focusing on short-run results, it is difficult if not impossible to also stay aware of the changes that are coming your way. Your mind is like a camera. You can either focus on the close-up view, rendering the long view out of focus, or the opposite. I have met many (E)ntrepreneurs who were lucky enough to be fired from their former jobs, where they were busy (P)-ing. If they had stayed put, they would never have started anything new. Conversely, (E) threatens (P): (E)ntrepreneuring means change, and that threatens the (P) role. People in (P)roduction are forever complaining to the engineering department, If you guys dont stop changing things, well never get anything done! At some point, you have to freeze the planning so you can proceed with the doing

(P) AND (A) INCOMPATIBILITY

Any combination of the four roles is incompatible, not just (P) and (E). Lets look at another combination: (P) and (A).When you play doubles in tennis, and a ball is coming at high speed directly to the center of the court, do you wait until youre sure where its going to land before deciding who is responsible for hitting it back? Obviously not. Do you make a

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line in the middle with some whitewash so you and your partner know exactly who is responsible for what area? I dont think so. You divide the court among yourselves, more or less. And when the ball hits the middle of the court, in the gray area of responsibility, then you both move for the ball. That is effective, because one of you will hit the ball, but it is not very efficient. In the efficient scenario, no one moves until the ball has landed - although by that time its too late for anyone to return it. That, of course, is ineffective. Effectiveness (P) and efficiency (A) are incompatible goals. When you want to be very effective, you have difficulty being efficient. Thats why start-up companies, which are constantly putting out fires and dealing with unanticipated problems, are disorganized and inefficient. They accept the fact that organization and order(A) will have to wait. The opposite is also true: If you are very efficient, you end up less effective. In other words, when you have too much (A), you end up with reduced (P). That is the case with bureaucracies, in which every detail is planned and no variable is left uncontrolled. Ironically, the more control you have, the less control you feel you havebecause the more control you have, the more granularity you have and the more deviations you can identify that need to be controlled. So what happens? As the granularity of control increases, the system becomes increasingly inflexiblethus non-responsive to the changing needs of its clients. To use another tennis analogy: It is as if a player stands in one place, practicing and practicing until his hand and body movements are perfect, and then tells his opponent, "Send the ball hereto the spot he practiced in, where he can be the most efficient. In reality, he can only hit the balls that come directly to his racquet. He is just going through the motions, hoping that when he swings, the ball will be there to be returned. That is what I call being precisely wrong rather than being approximately right. And that is how bureaucracies work. Everything is planned and controlled to the minutest detail. No variable is left unattended. The fact that the ballthe client's changing needsis over there now instead of over here does not preoccupy anyone. They just go through the motions as planned for maximum efficiency and control. They are efficient to the extreme, making them inflexible and thus, eventually, extremely ineffective. To be approximately right, to be effective, you must go to where the ball is, even if it means your body is not moving most efficiently. This dichotomy of form vs. function, effectiveness vs. efficiency, could be observed as the Berlin Wall came down and the Communist system started to thaw. That system experienced tremendous difficult in its transition to a market economy, because in order to be more market-driven and -orientedin other words more effectivethey had to learn to be less efficient, with less regulation, less government planning and supervision. But when I lectured at the Academy of Science in Russia and tried to explain this concept, it was like selling pork to Hassidic Jews. The whole Communist system was based on (A); switching to a (P) orientation needed more than learning new principles of accounting; it needed a huge cultural change. This (P)/(A) incompatibility is in essence a struggle between form and function, and there are plenty of examples of that in life. For example, I used to wonder why women buy so many shoes. My wife explained it to me. She said a woman wants a sexy shoe. So she buys shoes that look good, but then they are not very comfortable; who would feel comfortable walking in high heels? So the next time, she buys comfortable shoes, but guess what? They don't look sexy. Thus, those rooms full of shoes are the result of an endless and useless search for the perfect shoe in which form and function are in perfect balance, the impossible-to-find shoe that is both sexy and comfortable. You may have noticed the same problem with teapots: The shape is very attractive, but the tea spills all over the table. In that case, form got a higher priority than function. When something is created in which

(A)DMINISTRATION vs. (I)NTEGRATION INCOMPATIBILITY

Like (A), (I) is concerned with form. Each is concerned with an accepted set of rules that both drives and puts boundaries on behavior. (I) represents organic form, whereas (A) represents mechanistic form. By mechanistic, I mean that (A) is externally driven: (A) establishes parameters, and you must accept these

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parameters as they are given to you, whether you agree with them or not. If you break the rules, or deviate from them, you understand that there will be a penalty. (I) also sets parameters, but (I)s parameters are internally driven. Thus, an (I) can be even more constraining than an (A). Why? Because when you are both rule-maker and rule enforcer, cheating is impossible. You cannot deviate, even in the darkness where no one can see youbecause you are watching you. And you cannot escape from yourself. Here is an example: A man says to a married woman, Why dont we make love? She says, No, I cannot. He says, Why not? Your husband will never know. She says, Yes, but I will know. Thats (I). Why not? Because I will know. Nobody else has to know, I will know that I did something I shouldnt have done. Its internal, in contrast to (A), which is external: If I break these rules, I may be caught and punished; they will stone me to death or send me to Siberia. If you accept a code of external rules and make it your ownin other words, if you internalize itthat is (AI). If you are a dedicated Communistyou believe in Communism and are willing to die for itthen you have internalized the external rules of Communism. That can be an overpowering combination that makes you extremely inflexible. It is not strange at all, then, that many Russians committed suicide when Stalin was denounced and exposed as a criminal. It destroyed many peoples internal belief system. Does this similarity of function mean that (A) and (I) are actually compatible? Not at all. (A) undermines (I) because the organization will rely on external, legalistic mechanistic rules to control interdependencies and relationships, and thus rely less on internal and cultural values. Why does (A) replace (I) so easily? Because it is easier to legislate a rule than to develop a value. To make a new law might take a few months. To develop a new code of ethics might take a lifetime. Furthermore, some (A) rules might be in conflict with some (I) values. Thus, (A) will always tend to increase as a regulatory mechanismwhich in turn will make (I) less necessary and poorly reinforced. The more (A) you have, the less (I) you will have. All those (A) mechanistic rules and policies devour any effort to remain organically interdependent. In the beginning years of a new religion, for example, the founding group of believers dont have a lot of (A). What they have is a commitment to God and a shared value system, which enables them to decide among themselves about what is the right thing to do. They have lots of (I). Later on, as the religion becomes successful and expands, the group loses its tight (I)ntegration and by necessity becomes more and more rule-driven. Eventually, the tail begins to wag the dog: The (A) rules start to dominate. Instead of (I)ntegration serving as the glue that unites the community through consistency of beliefs, the organization emphasizes rituals and rules, (A), and the religion becomes more and more rigid. It becomes an organized religion, and its believers conform to the rules of conduct rather than the spirit of the content. (A) destroys (I). Here is another example of (A) undermining (I): Which country has the most lawyers per capita? The United States. (A) is very high and growing; our court system is overloaded. We are constantly seeking external-to-ourselves interventions to solve our interdependency problems. (A) is penetrating deeper and deeper into our social fabric dictating how we should raise our children, how to address our spouses, where and how we can and cannot smoke, eat, talk. At your local bookstore, the largest and fastest-growing section is very likely the self-help aisle, where you can find rules for doing everything from finding a life partner, to planning a party, to resolving an argument or making friends. It is lots of rules for everything. (A) galore. How about (I)? It is flourishing too. Endless courses on intimacy, love, relationships, communication, self growth, self actualization. Look at many bumper stickers on American cars. LOVE is probably the most repeated word: I love New York. I love my dog. Jesus loves you etc. Why this preoccupation with love? Because love is the ultimate integration and it is in high demand because it is threatened by change. The more change the more alienation which seems the overwhelming result of modern life. Furthermore, the bigger the city, the more lonely people feel, because the less (I) there is. So both the need for (A) and (I) are growing because of change. But the more you rely on (A) rules to solve whatever interrelationship you have the less you will rely on your internal

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guide, your internal voice. (A) is easier to follow. It is mechanical. (I) is more difficult and it is natural that when confronted with choice, easy or difficult, the easy approach wins. Now lets look at the reverse: How does (I) undermine (A)? Actually, the word undermine is inaccurate in this context; rather, (I) retards the development of (A), because the more (I) you have, the less (A) you need. In a tribal community, the tribe relies on its internally developed values to make decisions and resolve conflicts. They do not need external intervention, like police or the courts, to solve problems. They have a very strong value system that tells them whats right and whats wrong; thus, they dont need anybody else to tell them what to do. So the more (I) there is, the less need for (A). I want to point out that this (I)/(A) incompatibility is unlike any of the other combinations of roles. Incompatibility can be positive or negative. When (A) pushes (I) out, the two roles are being incompatible in a destructive way. But when (I) retards the growth of (A), they are being incompatible in a positive way. This is in opposition to all of the other pairings. As we have seen, when (E) undermines (P) or (P) undermines (E), its undesirable. When (P) undermines (A) or (A) undermines (P), its undesirable. We shall also see that when (I) undermines (P) or (P) undermines (I), its undesirable. And so on. But when (I) undermines (A), its desirable. Why that is true, I dont know. Now, I have found in my work that when my theories come together correctly, there is a balance to them, an elegance, as in mathematics. Any time something is off balance in my work, I know there is a fallacy in the argument. Sometimes it takes me years to find what the fallacy is and how to correct it. The above is one of them. This (I)/(A) anomaly demonstrates a lack of elegance, which means to me that there is something missing, something not quite accurate about my theory. But it is a problem for which I do not have a solution. This is the best I can do today. I prefer to point it out to my readers rather than ignore it or gloss over it. Perhaps one of the readers will be able to help solve it. What I do know already is that for (I) a threshold of (A) is necessary of (I) can not grow. But for (A) there is no threshold of (I) necessary. What is going on and why? Go figure it out, I do not know.

(P) THREATENS (I); (I) ENDANGERS (P)

Have you ever attended a course or workshop where you were taught how to be a better (I)ntegrator: How to relate better to people and be a good communicator and a sensitive human being? Then you returned to work, and soon there was a crisis, and time pressure, and you had to have a meeting in which you had to (P), then and there. There was no time

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to convince, explain, or motivate. What happened to your team orientation and ability to listen patiently? When there is time pressure to (P)roduce results, it is normal to become rather dictatorial and assign a lower priority to (I)ntegration and the needs of some stakeholders. The (P) squeezes the (I) out. No matter how many times you may have gone to a meeting promising yourself that this time youll be patient and understanding and people-oriented, situations inevitably arise in which decisions have to be made now! And what are you thinking, as you sit fidgeting in a meeting and checking your watch for the fifteenth time? The hell with peoples expectations to be heard fully! We have a railroad to run here! Right? By the same token, (I) undermines (P) by applying parameters, very much the way that (A) does. How does applying (I) parameters undermine (P)? Ill give you an example, again from religion: If the very religious Jews, dressed in black, dont have much to eat and there is no work and no food, and you ask them, What are you going to do? what do they say? God will help. God will provide. Period. They have total confidence. This is true of very religious Muslims and Christians too. Now, if you are not religious, you are not going to sit around waiting for God to provide, are you? Youre going to go and find work or food or both. Youre going to (P). So people with a large amount of faith, or (I), will stay within the parameters of their value system, and this interferes with their ability to (P). Even if it is a matter of life and death, they will not violate any rules. What if the exigencies of a situation require them to break a rule? Still, they will not do it. Why? Because it violates their internalized rules.

THE STRUGGLE BETWEEN (E) AND (I)

Why are (E) and (I) in conflict? Because (E) want to change, to create, to make a difference; whereas (I) wants harmony, agreement, (I)ntegration. What (I) tries to put together or keep together, (E) wants to take apart.

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When Martin Luther tried to reform the Catholic church in the 16th century, the church reacted by undermining him at every step. The church hierarchy saw Luthers innovations as a threat to Catholicism. Heres another, rather complicated example of how (I) undermines (E): Which country once had the fewest lawyers per capita? Japan. In Japan, until just a few years ago, there was a great deal of loyalty and interdependence in business because their (I) was high. Corporations offered lifetime employment and a family environment. They took care of each other; they were guided more by their culture than by their legal institutions. Their need for (A)strict rules and policieswas low. However, in recent years Japan has changed: Its (A) has grown and its (I) has declined. Why has this happened? Because the four roles were never in balance in Japan, and that created an unstable situation. The Japanese have not, historically, been individualistic innovators. Japanese education system has always been weak in (E). They teach to know and to remember not to disagree and stand out as an individual. Their (E)ntrepreneuring stems from group interactions essentially getting to (E) through (I). Why is their (E) low? Because their (I) is so enormous, and (I) threatens (E). When I work in any other country in the world, when the group agrees on a subject, we clap our hands and shout, Yes! When I work in Japan, I reverse my rules: When somebody in the room says, I have a different opinion, thats when we clap hands and shout Yes! Why? Because the Japanese rarely disagree with each other. They are always watching to see where the consensus is, and thats where they want to go. Remember my analogy in the preface, of the four roles as vitamins? In order to get benefit from taking lots of vitamin (A), you also have to take lots of vitamin (E). If there is no more (E), the benefit stops. A shortage of one will limit the effectiveness of the others even if the others are in excess. And that is because the roles like vitamins are interdependent. If one component is missing from your diet, the other components can not make you healthier unless you get more of the missing component. When did Japan lose its competitive advantage? When the rate of change, worldwide, began to accelerate, and decision-making needed to be faster. With too much (I) and too little (E), Japan could not adapt and speed up. At the same time as interdependencies increased (governments with corporations; banks with governments, etc.), their (A) increased. In Japan, because (I) is high, (E) is low and (A) increased, (P) eventually had to decline. When Japan hit the skids, what did they do? In order to increase (P)roduction, the Japanese had to sacrifice a lot of their (I) and replace it with more (A). Why? When (P)roduction declines, or the economy is in trouble, management often chooses to reduce (I)ntegration methods of managing interdependencies in favor of more systematization, or (A). The manifestation of that is that Japanese businesses no longer make a lifetime commitment to people; the family atmosphere is gone; people can actually be fired. What is left is an enormous (A) bureaucracy that is further eroding Japanese (P) and (I) and will not allow (E) to grow. As a result, Japan is in a very difficult decline, for which there is no short-term solution. Without any homegrown (E), they are being forced to bring in corporate officers from abroad in order to grow. (For example, the head of Nissan is from Brazil, and he is hailed as a hero. The Japanese auto industry sees this experiment as a model to follow.) What does Japan need? It needs to change its educational system in order to support and increase its (E); in other words, it should start teaching people how to learn rather than how to know. It must begin to prize deviant thinking, out-of-the-box thinking, and reward individualism instead of rewarding (A). And the country must learn to do this without losing its own cultural competitive advantage(I). If that is impossible, then the Japanese need to open their gates and stimulate immigration by other nationalities with a lot of (E)the Greeks, the Jews, or the Indianswhich Japan, a particularly closed society, finds undesirable.

THE CONFLICT BETWEEN (E) AND (A)

Finally, how are (E)ntrepreneurship and (A)dministration incompatible? This one is easy to see. (E)s are radical, whereas (A)s are conservative. (A)s want control in order to maximize efficiency, and they try to get it by minimizing deviations; whereas (E)s live to create deviationsby introducing change, which is in fact necessary for long-term effectiveness. Thus, (E) threatens (A) because too much change hinders systematization, routine, and order.

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And of course the opposite is also true: (A) endangers (E). As you freeze new ideas for the sake of efficiency, your ability to be proactive and effective in the long run will become limited. Policies, rules, and institutionalized behavior inhibit change. Let s take the example of Communist Russia. (A) was so dominant that anybody who was an (E)ntrepreneur was called a spekulant, or speculator, which definitely had a negative connotation: It meant somebody who would undermine the centrally planned economy of Russia. Hardly anybody dared to be an (E)ntrepreneur in Communist Russia, which carried the danger of being sent to prison. My own father, who owned a mom-and-pop store, was thrown in jail in Yugoslavia for not following the Communist ideology of public ownership of property. By trying to innovate outside of the rules, he became an enemy of the people.

THE IMPOSSIBLE DREAM

Now, lets go back to our Chapter 1, to the summary of what a manager should do, and classify each task in (PAEI) terms. It should become clear that what is expected from ideal managers, executives, leaders, is to be (PAEI)s and since the roles are incompatible, at a point in time, that can not happen, or it will be extremely rare to happen.

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The ideal manager is knowledgeable and achievement-oriented, (P); detail-oriented, (A); systematic and efficiency-oriented, (A); organized, a logical and linear thinker, (A); charismatic, visionary, a risk-taker, and change-oriented, (E); and sensitive to people and their needs, (I). He can integrate all the necessary people to successfully achieve goals, (I). He knows how to build a team while making himself dispensable, (I). He judges himself by how well his group performs; by how well, together and individually, the group members achieve their goals, and by how well he facilitates the achievement of those goals, (IP). He listens carefully, not only to what is being said but also to what is not being said, (I). He understands the need to change, (E), but introduces change cautiously and selectively, (A). He is able to identify leadership potential among his staff and is not afraid to hire and promote bright, challenging subordinates, (I). He doesnt complain when things go wrong, but offers constructive criticism instead, (I). His subordinates are not afraid to report failures; they know that he will be reasonable and supportive, (I). He encourages creativity, (E), and looks for support, (I), in decision-making. He is charismatic, (E), capable of motivating others to work hard to achieve the goals of the organization, (IP). He can delegate. (To delegate, one transfers the (P) role to someone else.) He trains his subordinates systematically, (A). He resolves conflicts diplomatically, respecting peoples expectations and ambitions and appealing to their social consciences, (I). He shares information instead of monopolizing it and using it to gain power, (I). He is driven by a strong code of values, (I). He is analytical and action-oriented, (P); sensitive without being overly emotional, (I). He seeks results, (P), but never by sacrificing the process, (A). He systematically develops markets, production facilities, finances, and human resources for the organization, (E). What else does management involve? According to the dictionary definitions we examined earlier, to manage means to: Operate, (PA); organize, (A) or (pAei); rule, (A) or (pAei); control, (A) or (pAei); achieve goals (Paei); and lead, which could be any of these three combinations: (PaeI), (pAeI), or (paEI). (See Chapter 11 for more detail on the qualities of leadership.) Finally, he must be able to plan. This requires having specific results in mind, (P); having a vision for the future, (E); paying attention to the details of implementation, (A); and gathering support from those who will perform implementation, (I). Thus, this one task alone requires all four roles. He must be able to control, (A)but here, again, the control must be in the service of facilitating a result, (P), without losing flexibility, (E); and it must be generally supported by the people to be effective, (I). When you add it all together, what do you get? A (PAEI)and that is too much to ask for. That is why neither you nor I nor any of the gurus who teach and preach management can actually be the ideal managers they claim they can create. What should we do, then? Does this mean that every company and organization, by definition, will be mismanaged? Now that we have defined management, and why the idea executive does not an can not exist and described the styles of normal managers with strengths and weaknesses, we should proceed to describe mismanagement styles that should be avoided, and than we will be ready to prescribe what good management is and how it works.